Ambrose Evans-Pritchard has covered world politics and economics for 30 years, based in Europe, the US, and Latin America. He joined the Telegraph in 1991, serving as Washington correspondent and later Europe correspondent in Brussels. He is now International Business Editor in London. Subscribe to the City Briefing e-mail.

If Citigroup is right, the slight rebound in Europe over the summer will not be enough to stop Club Med going from bad to worse, with a string of soft defaults/restructurings.

I pass their latest forecasts on to readers. I do not endorse them.

Italy will bounce along in near-permanent recession with growth of 0.1pc in 2014, zero in 2015, and 0.2pc in 2016. The debt will punch above 140pc of GDP, beyond the point of no return for a country with no economic growth or sovereign currency.

"We do not expect the public debt ratio will enter a downtrend in coming years, and we suspect that some form of debt restructuring (maturity lengthening and/or coupon reductions) may be likely eventually," said the bank.

Portugal is in an even worse state, with growth of: 0.6pc, 0.0pc, 1.0pc, over the next three years, with debt hitting 149pc of GDP by 2015, and unemployment rising again to 18.3pc:

Given the fiscal tightening still to come, ongoing private deleveraging and ensuing poor nominal GDP growth prospects, doubts still exist about the sustainability of the Portuguese public debt in our view."

A second full bail-out programme remains a clear risk in the event of market sentiment deteriorating. In any case, we think a Greek-style public debt restructuring unlikely in the near future, but a restructuring of some government contingent liabilities is still possible.

Greece continues to be a catastrophe. The alleged stabilisation will prove to be a false dawn. The economy will contract by a further 2.9pc in 2014, and 1.4pc in 2015, pushing unemployment to 32.4pc, and the debt to 201pc of GDP.

Spain will not default or need debt restructuring, which looks to me like a change in forecast. However, growth will be just 0.1pc next year, 0.3pc in 2015, and 0.7pc in 2016, not enough to stop unemployment rising yet further to 27.9pc.

Ireland will make it. The country is highly competitive and has little in common with the others.

If Citigroup is broadly correct, Europe faces a lost decade that is far worse than anything suffered by Japan, which will render the region marginal in coming world affairs, and is likely to have non-linear political consequences. The lesson of the 1930s is that you have to discredit both the moderate Left and Right in turn before voters turn to extreme parties en masse.

I cannot see how perma-slump and rising unemployment can continue through to 2017 without patience snapping. But such judgements are entirely political, and therefore intuitive. You have to speak the languages of these countries and know them very well to have any useful insights.

Citi's team is headed by ardent euro-federalist Willem Buiter, and most of his team are from eurozone countries, so this is not an Anglo-Saxon report.

Of course, there is always the possibility that they are completely wrong. They had better be wrong.